The global economy’s synchronized upswing should continue into 2018 but China’s plan to slow borrowing is a key uncertainty, according to Andrew Tilton, chief Asia-Pacific economist for Goldman Sachs Group Inc.

"We’re pretty optimistic about the year ahead," Tilton said in a Bloomberg Television interview. "We think we still have some room to grow in a lot of the world, and in Asia."

But China’s plan to rein in financial risk is one of the biggest unknowns, Tilton said Tuesday. Authorities in Beijing have pledged to focus less on the pace of economic growth and instead shift the world’s second-largest economy to a more sustainable footing.

"That’s one of the key debates," Tilton said. "The pace at which they decide to move and their ability to implement that gradually is really the key for 2018. China is almost half the world’s investment, so managing that tightening in that area and that gradual investment slowdown is really key, not just for China but for the whole world."

China’s total debt will climb to 327 percent of gross domestic product by 2022, Bloomberg Economics researchers wrote in a report released Tuesday. Officials have ramped up warnings on the need to rein in debt. People’s Bank of China Governor Zhou Xiaochuan last month warned about the risk of a ‘Minsky moment,’ or a sudden collapse of asset values.

In their latest move, financial regulators on Friday unveiled a proposal to overhaul regulation of asset-management products, which hold about $15 trillion and are seen as threats to economic stability.

Upside Surprise

On the rest of Asia, Tilton says India’s economy could prove to be stronger than expected as the shock from an unprecedented cash ban and a move to introduce a new nationwide consumption tax begins to fade.

"The good thing about next year is we don’t think we’re going to get those shocks again," he said.

Moody’s Investors Service last week surprised markets when it raised India’s sovereign rating for the first time since 2004, overlooking short-term economic uncertainties to bet on the nation’s prospects amid a raft of policy overhauls from Prime Minister Narendra Modi. The ratings firm said government reforms will help stabilize rising levels of debt.

"While there’s still lots to do in India, we think growth can surprise to the upside," Tilton said.